On October 13, 2016, the United States House of Representatives requested permission of the Court of Claims to file an amicus brief in Health Republic v. United States. Health Republic was the first of at least eight cases that have now been filed by insurers challenging the failure of the government to pay the full amount they claimed under the risk corridor formula contained in the ACA. The risk corridor program is one of the three premium stabilization programs created by the ACA. It collects contributions from participating insurers that make profits that exceed certain statutory “risk corridors” and make payments to insurers whose losses fall outside those risk corridors.
Although the risk corridor statute seems to require payments to insurers with excessive losses regardless of the amount actually collected under the program from profitable insurers, Congress adopted appropriations riders in 2015 and 2016 making the program budget neutral—that is, limiting the administration to paying out only as much as it collected under the program. In fact, HHS paid out only 12.6 cents on the dollar for claims for 2014 and has announced that all 2015 collections will go to 2014 claims.
The administration moved to dismiss the Health Republic case in June, but argued only that the case was premature because the risk corridor program was still ongoing and more money might be paid later. In guidance released in September, HHS suggested that the full amount due insurers under the program would have to be paid and that it was open to settling the cases against it. This provoked a furious outcry from Republicans in Congress, who accused the administration of trying to make an end run around the appropriations rider. In late September, the administration filed motions and briefs in other risk corridor cases arguing that in fact the appropriations rider cut off any further risk corridor funding for 2014.
Read the full article here.